The Edmond Sun

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January 20, 2012

Legislators brace for state revenue shortfall

James Coburn The Edmond Sun

EDMOND — The state of Oklahoma will have a revenue gap when the 2012 legislative session begins at noon Feb. 6, said state Sen. Clark Jolley, R-Edmond.

“These grandiose visions that agencies are going to get hundreds of millions of dollar more than they got last year, because we’re back healthy, or even $1 million more is probably not going to happen,” Jolley said Friday at a legislative breakfast sponsored by the Edmond Area Chamber of Commerce at Oklahoma Christian University.

Department and agency heads have been coming to his office asking for the restoration of funding levels from two years ago.

“Despite what my good friend Ken Miller (state treasurer) has been saying in the media, Oklahoma’s economy has not completely recovered and we are not completely out of the woods yet,” said Jolley, chairman of the Senate Appropriations Committee.

One more certification is needed before the Legislature will know how much of a budget shortfall it will have this year, Jolley said. Gov. Mary Fallin bases her budget on the November revenue certification.

“That one is $150 million short of what we spent last year when you take the one-time revenues out,” Jolley said.

Oklahoma’s economy looks good for 2012 with room for optimism with December revenue receipts up 11.1 percent more than the same period in 2010, Miller said recently. This marks the 22nd month of continuous improvement, Miller said.

Miller reported that the 12-month collection period was $1.3 billion more than the recession’s low point of 2010. Personal income tax collections rose by 16 percent. Corporate profits are strong with a December tax revenue increase of 92 percent, he added.

“Health insurance benefits have gone up,” Jolley said. “We’re going to have to give education $35 million this year just so they don’t lose money at the local level for required payments for insurance.”

Edmond City Councilwoman Elizabeth Waner noted that the City of Edmond is solely funded by sales tax. So it is important for the city to make sure it receives its fair share of revenue, she said.

State Rep. Randy McDaniel, R-Edmond, said Oklahoma is one of a few states with municipal employees under the state’s retirement system.

“The sales tax is going to be something we hope to greatly enhance over the years. We enjoy the partnership,” McDaniel said. “I know you want a more diversified funding stream and I’m definitely willing to listen to any idea you might have on that.”

State Rep. Jason Murphey, R-Guthrie, said the collections practice of the Oklahoma Tax Commission has been frustrating. The Tax Commission has used some outmoded computer systems that were not able to catch remittance errors, Murphey said. Small business is punished by punitive policies that require advanced deposits, based on estimates.

“I hope when they have the upgrade that they are working on, that they will be able to catch those who are not submitting, and obviously submit that to the city where it belongs,” Murphey said.

Republican state Rep. Randy Grau of Edmond said he supports cities having more flexibility and power to collect sales tax revenue. He also said the state’s tax code does not address the tax free Internet sales, which results in a loss of city revenue.

“We’ve got to figure out ways for municipalities to be creative and diversify their tax base,” Grau said.

The majority of Edmond’s state delegation will be up for re-election consideration this year.



jcoburn@edmondsun.com | 341-2121, ext. 114

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